Paul Graham is ridiculously suggesting that “Microsoft is Dead“.

I remember back in the 90’s when many where suggesting how IBM was dead, and how obvious it was that the Apples and Microsofts and clever upstarts would make IBM obsolete.

As this chart shows IBM has thrived since that time, and though they hardly make the news much anymore it’s very important to note that IBM is a bigger company (measured by capitalization) than the following “big winners”: Google, Apple, Yahoo.

Also notable is the fact that what is probably the best search algorithm in the world belongs to … IBM. It’s called “WebFountain”. It’s not scalable and therefore not an alternative to Google at this time, but one can’t even count IBM out of the *search wars*, let alone Microsoft.

Microsoft isn’t dead. Not even close. Of course it is suffering from the inertia that naturally springs from huge success and dominance, but like IBM it will find new markets, new niches, and will benefit (eventually) from the innovations of it’s competitors as they were able to benefit – hugely – from Microsoft innovations (e.g. free internet browser software on all PCs).

Don Dodge corrects the foolishness, and Tony is right to suggest that MS has plenty of life left.

It’s even possible that Microsoft will win the big game. With the LIVE project, Microsoft’s neural network approach to search may be more advanced than Google’s and although search result quality continues to lag Google’s by a notch it’s simply not clear how search will evolve over the next few years.